IDEAS home Printed from https://ideas.repec.org/a/fau/fauart/v69y2019i3p275-297.html
   My bibliography  Save this article

What Drives the Distributional Dynamics of Client Interest Rates on Consumer Loans in the Czech Republic?

Author

Listed:
  • Václav Brož

    (Institute of Economic Studies, Charles University, Prague, Czech Republic
    Czech National Bank, Prague, Czech Republic)

  • Michal Hlavácek

    (Institute of Economic Studies, Charles University, Prague, Czech Republic)

Abstract

We study determinants of the bank-level distributional dynamics of client interest rates on consumer loans in the Czech Republic in the recent period 2014–2019 when banks started to provide new consumer loans at very low interest rates. We build on the relevant literature in terms of the selected explanatory variables as well as the methodological approach and use regulatory data that enable us to work with the mean, median and the mode of the distribution of client interest rates on consumer loans. We show that development of the market rate, the NPL ratio as well as the unemployment rate facilitated the observed distributional dynamics. Further, using a variety of variables on market competition/market concentration, our analysis reveals that the role of this determinant is limited at best. Our results, especially regarding the pass through from market rates to consumer loan rates, are mostly in line with the international literature but are novel in the Czech context.

Suggested Citation

  • Václav Brož & Michal Hlavácek, 2019. "What Drives the Distributional Dynamics of Client Interest Rates on Consumer Loans in the Czech Republic?," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 69(3), pages 275-297, June.
    • Handle: RePEc:fau:fauart:v:69:y:2019:i:3:p:275-297
    as

    Download full text from publisher

    File URL: http://journal.fsv.cuni.cz/storage/1438_175_197_broz_final_issue_3_2019.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dominika Ehrenbergerová & Martin Hodula & Zuzana Gric, 2022. "Does capital-based regulation affect bank pricing policy?," Journal of Regulatory Economics, Springer, vol. 61(2), pages 135-167, April.

    More about this item

    Keywords

    banks; client interest rates; consumer loans; market concentration; pass-through;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C46 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Specific Distributions
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fau:fauart:v:69:y:2019:i:3:p:275-297. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Natalie Svarcova (email available below). General contact details of provider: https://edirc.repec.org/data/icunicz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.